Traverse City Business News | Insurance for Outliers: Needs differ for Cherry Capital Airport, baseball, casinos and National Cherry Fest


Insurance for Outliers: Needs differ for Cherry Capital Airport, baseball, casinos and National Cherry Fest

Businesses carry insurance of all sorts: liability, worker’s compensation and health insurance, for example. Restaurants and bars need coverage for the challenges related to alcohol.

But there are other entities that have specialized needs. For example, what if you’re not a regular retail operation, but an airport?

At Cherry Capital Airport, the needs include the property and the people – but much more. CEO Kevin Klein says the insurance requirements include buildings, auto, personal property and general liability. Acts of nature such as lightning strikes, fires and floods can damage an airport’s infrastructure, with the potential of exorbitant repair costs, as well as costly business interruptions.

Klein

Other potential threats include theft, vandalism and the possibility of a crash landing leading to damage. Another major risk category is liability, as passengers, airlines and even homeowners living near the airport could file a lawsuit for many reasons.

But wait, there’s more: Pollution insurance is necessary to cover clean-up if there is a spill or fuel or other toxic substance, as well as treating, detoxifying and removing of pollutants. Pollution coverage can also cover third-party bodily injury and property damage liability.

Klein said the thing that sets airports apart is the need for aviation insurance, covering up to $100 million. While Cherry Capital Airport employees are covered by airport insurance, air traffic controllers are federal employees and are subject to governmental rules and regulations.

Airport liability is serious, but baseball is also risky business, especially when you have the right insurance carrier, said Joe Chamberlin, CEO of the West Michigan Whitecaps and the Traverse City Pit Spitters.

“Finding carriers is really the key, and there are a number of carriers that have a lot of experience,” he said.

The food and beverage side of baseball is similar to that of restaurants and bars, and a stadium’s maintenance is like a janitorial service. In many ways, the coverage mirrors other venues, though most arenas and theaters don’t face the prospect of a foul ball heading into the stands.

Then there are the moments when Chamberlin says minor league baseball teams “push the envelope.”

That could mean flying a helicopter over the ballpark or having people sky dive to the Open Space wearing a Pit Spitters jersey.

“In minor league baseball it’s all about having fun,” he said.

Bartosh

Cannabis is a growing business in Michigan, figuratively and literally. The product’s status as illegal in the U.S., legal in Michigan, and regulated by local municipalities, means finding insurance is a challenge. Tyler Bartosh of Spire Insurance in Traverse City said his company saw the potential and is one of the few offering coverage in the space.

“A couple years ago we saw it coming,” he said.

Spire offers insurance protection of various types “from seed to sale” as Bartosh put it. He said the product’s unique standing and the fact it crosses over from grow operations to processing, transportation and sales means there is potential for risk at many levels.

“You can’t cover everything like in manufacturing or agriculture risk,” said Bartosh. “We have to have those difficult conversations.”

He said those conversations also include how the cost for coverage can be significant. He said it’s important to make sure their clients understand exactly what they are insuring and what the costs are so they can choose what portions of their business to protect.

“I like to educate and provide options,” Bartosh said. “I’ll answer their questions and guide them, but it’s their choice.”

Spire was actually started as a separate division of Top O’ Michigan Insurance to specialize in the cannabis industry and other commercial operations across Michigan and other states as well. Bartosh sees the potential for growth for his company as operations continue to expand.

“My guess is it’s two to five percent of our book of business,” he said. “We’ll see it grow to 10 to 25 percent in Michigan alone as we expand to other states.”

One might think casinos would need specialized insurance, but it’s not so much the casino as it is the entire scope of tribal operations.

While the Grand Traverse Band declined to offer any specifics, a representative for several other tribes offered perspective on tribal insurance challenges.

“The needs are no different than any other corporation. The complexities are related to the federal government,” said Alan Boose, a sales representative for the Mahoney Group & Tribal Risk Insurance Solutions.

Boose

Boose works with four tribes in the state: Bay Mills Community, Saginaw Chippewa, Sault Tribe and Nottawaseppi.

He said most tribes have their own legal system separate from the state.

“Most tribes have their own ordinances,” he said. “So they have to carry professional liability, general liability and liquor liability for their properties.”

The big difference with tribal communities is that they avoid state courts, but not federal laws, which supercede those of the tribe. For example, he said tribes have to comply with federal Occupational Health and Safety Act laws, but not the laws of Michigan’s occupational health and safety act.

The Federal Tort Claims Act means tribes get grants for services such as fire, police and social agencies.

“That’s advantageous for tribes,” Boose said. “The federal government becomes the defendant in a lawsuit, not the tribe. From an insurance standpoint, the carrier knows some claims may go to the federal government.”

Given that, Boose says he is “surprised” there are only two major carriers.

Regarding specific casinos, he said each tribe’s approach to insurance is unique. Some put everything under one umbrella, while others seek separate coverage for the casino, the municipality, even the tribe’s economic development corporation.

“Casinos are not atypical (businesses). There’s risk and liability as with any retail (operation),” he said. “There’s not much exposure from gaming. It’s just that gaming brings in a lot of people.”

You’ll also find a lot of people at the National Cherry Festival. Executive Director Kat Paye said the popularity of festivals across the country means there are plenty of carriers from which to choose. Good thing, because the needs are many and varied.

Paye

“We have coverage everywhere,” said Paye. “If a volunteer is injured, damage to vehicles from a parade float, air shows, mountain biking.”

For the latter, a major event of which took place last month, “(w)e get (coverage) for the Iceman Cometh through USA Cycling.”

There’s even hole-in-one insurance for the annual hole in one contest. It’s covered by Hole In One International.

“There’s insurance for most things,” she said.

Most, but not all: One area where the National Cherry Festival doesn’t include coverage is for inclement weather impacting the concerts.

“Some carriers offer rain insurance if a concert is rained out,” she said. “We don’t carry that. We take the risk.”

Paye said all the contracts and responsibilities for the different insurance programs fall to her. Fortunately she’s familiar with the industry.

“I used to work for Hagerty,” she noted.

 

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